Interest earned on your savings account is taxable and must be reported in your income tax return. To reduce the tax burden, Section 80TTA allows individuals and HUFs under the old tax regime to claim a deduction of up to ₹10,000 on total interest income earned from savings accounts. This deduction is not available under the new tax regime.

Resident senior citizens are not eligible under this section and can instead claim deduction up to ₹50,000 under Section 80TTB on the interest income earned.

Which Accounts Qualify for Section 80TTA Deduction?

You can claim the deduction on interest earned from:

• Savings accounts with banks
• Savings accounts with post offices
• Savings accounts with co-operative banks

You cannot claim this deduction on:

• Fixed Deposits (FDs)
• Recurring Deposits (RDs)

Who Can Claim Section 80TTA Deduction?

To claim a deduction under Section 80TTA, you must meet the following conditions:

• You must be an individual or a Hindu Undivided Family (HUF). Companies and firms cannot claim this deduction.
• You must earn interest from savings accounts held with a bank, post office, or a co-operative society engaged in banking (co-operative bank).
• You can claim a maximum deduction of ₹10,000 in a financial year. Any interest above this limit is taxable.
• You cannot claim this deduction on fixed deposits, recurring deposits, or other term deposits.
• Senior citizens are not eligible under this section. They can claim up to ₹50,000 under Section 80TTB instead.
• This deduction is available only under the old tax regime and not under the new tax regime.

How is Section 80TTA Deduction Calculated?

Follow these steps:

Step 1: Add the total interest earned from all your savings accounts during the financial year.

Step 2: Compare the total with the ₹10,000 limit.

Step 3: Claim the lower of the two as a deduction.

Note: The ₹10,000 limit applies in total across all savings accounts, not per account.

You can also use an online savings account interest calculator to estimate the interest earned during the year before checking how much deduction can be claimed under Section 80TTA.

How Do You Claim Section 80TTA in Your Income Tax Return?

Follow these steps while filing your income tax return:

Step 1: Report your savings account interest under “Income from Other Sources.”

Step 2: Go to Chapter VI-A deductions and enter the eligible amount under Section 80TTA.

Step 3: Ensure the deduction does not exceed ₹10,000 or your actual interest income.

Step 4: Keep bank statements or interest certificates for reference.

You must claim this deduction manually while filing your return. It is not applied automatically unless you claim it.

Important Note: You can claim the Section 80 TTA deduction only if you choose the old tax regime. You cannot claim it under the new tax regime (Section 115BAC).

What Mistakes Should You Avoid While Claiming 80TTA?

Common mistakes taxpayers should check while claiming 80TTA deductions include:

• Not reporting savings account interest at all
• Claiming 80TTA on FD or RD interest
• Assuming senior citizens are eligible under 80TTA 
• Claiming more than the actual savings account interest
• Trying to claim it under the new tax regime

Final Thoughts

Section 80TTA is a useful deduction for taxpayers who earn interest from savings accounts. It is important to note that it applies only to eligible savings account interest, only up to ₹10,000, and only for eligible taxpayers under the old tax regime. Understanding these conditions ensures accurate tax filing and avoids unnecessary errors.

Disclaimer:
The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability. Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by the you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user’s own risk. Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness for any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever. To know more about Ujjivan Small Finance Bank Products Visit: "https://www.ujjivansfb.bank.in" All intellectual property rights, including copyrights, trademarks, and other proprietary rights, pertaining to the content and materials displayed herein, belong to Ujjivan Small Finance Bank Limited or its licensors. Unauthorised use or misuse of any intellectual property, or other content displayed herein is strictly prohibited and the same is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person’s nationality, residence or otherwise) be contrary to law or registration or would subject Ujjivan Small Finance Bank Limited or its affiliates to any licensing or registration requirements.

Explore Our Products